The Justice Department has decided that venture capital firms might actually have to follow the rules, and it's sent a chill through the industry. According to Bloomberg, the DOJ has launched a probe into Andreessen Horowitz (a16z) over its partners sitting on the boards of competing companies, a move that has VCs scratching their heads, presumably while counting their millions.

The investigation, which has been running for nearly a year, zeroes in on the firm's board seats at Databricks and Fivetran. Databricks, valued at a cool $190 billion, has co-founder Ben Horowitz on its board, while partner Martin Casado sits on the board of Fivetran, which merged with dbt Labs in June. These two companies are now competitors, which is awkward, but apparently they weren't rivals when a16z first invested. Because, as we all know, startups never pivot or expand into new markets. Ever.

Several VCs told TechCrunch they were surprised by the probe, as if the idea of a VC firm backing two companies that eventually compete is somehow shocking. With a16z's portfolio of hundreds of companies, it's practically inevitable that some startups will end up in the same sandbox, fighting over the same toys. But holding board seats? That's a whole different level of conflict.

Directors get to see all the juicy strategic secrets, unlike mere investors who just get the sanitized versions. The solution, as one investor noted, is to have a partner step down from a board, or, in this case, erect a so-called Chinese wall between Horowitz and Casado so they don't spill the beans to each other. Because nothing says 'we're serious about ethics' like a wall made of policy.

The DOJ is invoking Section 8 of the Clayton Act, a 112-year-old law that bars individuals or entities from serving on boards of competing companies. It's a law so old it predates the concept of 'disruption,' and it's rarely been used against venture capital. But now the industry is watching closely, because if a16z is forced to give up a seat, founders might start questioning whether a board seat from a top-tier VC is worth the hassle, especially if that VC might have to bail when a portfolio overlap turns into a conflict.

Andreessen Horowitz didn't respond to requests for comment, which is saying something, since they usually love to talk. Databricks and the DOJ also declined to comment, leaving the rest of us to speculate about the future of boardroom seating arrangements in Silicon Valley.